"Not only will this funding ensure we continue to have world-leading armed forces but will also allow defence to modernise our critical assets, such as our offensive cyber capabilities, anti-submarine warfare and our nuclear deterrent," he said.

Among the defence programmes that will benefit from the extra cash is the UK's continuous at-sea deterrent Dreadnought.

Its submarines will carry the Trident nuclear missiles when the current Vanguard class is scrapped.

Mr Hammond said in his speech the extra defence funding was prompted by "stark reminders in the past year of the scale, scope and complexity of the threats we face".